Delhi HC quashes FCRA proceedings against Former Punjab MLA- holds contribution made by NRIs through proper banking channels not ‘foreign contribution’ [Read Judgment]

The contribution made by a citizen of India living in another country (Non-resident Indian), from his personal savings, through the normal banking channels, is not treated as foreign contribution, the Court said quashing FCRA proceedings against the former MLA. The Delhi High Court has quashed FCRA proceedings against Former Punjab MLA, Arvind Khanna for receiving an amount of Rs.9, 04, 84,770/-from his father through eight foreign entities, without obtaining prior permission from the Central Government while he was serving as a Legislator. Justice Suresh Kait held that contribution made by an NRI, from his personal savings, through normal banking channels is not treated as foreign contribution. Background While he was serving as Legislator in Punjab assembly, Arvind Khanna received an amount of Rs.9, 04, 84,770/- from his father, through eight foreign entities, one of which is known as New Heaven Nominees’ and the other seven entities are managed by an entity known as ‘CI Law Trust’. The Ministry of Home Affairs sanctioned investigation in terms of Section 28 FCRA, 1976 alleging that the legislator received funds without obtaining prior permission of the Central Government. Accordingly, the Central Bureau of Investigation (CBI), registered the FIR mentioned above for violation of Section 23 (1) read with Section 4 (1) FCRA, 1976, against him for receiving the contribution from foreign entities without prior permission of the Central Government while he was an MLA. The former MLA, then moved a petition under Section 482 of CrPC before the High Court praying quashing of the FIR and Proceedings under FCRA. The contention of Arvind Khanna were mainly the following Amount received by him from his father, who is an Indian passport holder is a gift. The foreign entities through whom such funds were sent were holding the same on behalf of his father. Section 4 FCRA, 2010, now removes the requirement of prior permission from the Central Government. Hence he is completely exempted from any charge under Section 3 FCRA, 2010, as no prior permission is required. Section 41 FCRA, 2010, now made such offences as compoundable. FCRA, 1976 provisions Section 4(1) : No foreign contribution shall be accepted by any- (a) candidate for election, (b) correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper, (c) 3 [Judge, government servant] or employee of any corporation, (d) member of any Legislature, (e) political party or office-bearer thereof. Section 8(e): Nothing contained in section 4 shall apply to the acceptancefrom his relative when such foreign contribution has been received with the previous permission of the Central Government:(Whereas the FCRA, 2010 (Section 4(e)) does not require Central Government permission) Section 23: Punishment for the contravention of any provision of the Act (1) Whoever accepts, or assists any person, political party or organisation in accepting any foreign contribution or any currency from a foreign source, in contravention of any provision of this Act or any rule made thereunder, shall be punished with imprisonment for a term which may extend to five years, or with fine, or with both. Contribution made by ‘Indian’ father, not a foreign contribution The court held that contribution made by a citizen of India living in another country (NonResident Indian), from his personal savings, through the normal banking channels, is not treated as foreign contribution. However, the court said that, while accepting any donation from such NRI, it is advisable to obtain his passport details to ascertain that he/she is an Indian Passport holder. Admittedly, father of the petitioner is an Indian Passport holder and transaction is through banking channel, the court observed. The court further observed that Section 4(e) completely excludes from the operation of FCRA, 2010, if any foreign contribution received from a relative. Nature of foreign sources not specifically stated In order to make out violation of Section 4 FCRA, 1976, the charge sheet must state as to from which of the foreign sources as set out in Section 2 (1) (c) FCRA, 1976, or like foreign source, the petitioner received such foreign contribution, the court said while observing that the charge sheet only states that the accused received funds from overseas firms/companies/trusts which are not registered/incorporated anywhere in India, without specifically finding the nature of foreign sources in order to bring them within the ambit of definition ‘foreign sources’, as prescribed in Section 2 (1) (e) FCRA, 1976. Accused entitled to benefit of subsequent amendment The court also observed that The FCRA, 2010 came into force w.e.f. 01.05.2011 and this Actexpands the categories of transactions exempted from the Act and further makes all offences compoundable. The court said it is settled proposition of law that where after commission of offence, there has been an amendment in the law which modifies the severity of the law or reduces the rigors of the law, then the accused is entitled to the benefit of such subsequent beneficial amendment in the law.

Read more at: http://www.livelaw.in/delhi-hc-quashes-fcra-proceedings-against-former-punjab-mla-holds-contribution-made-by-nris-through-proper-banking-channels-not-foreign-contribution/